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LPG Supply/Demand Highlights

Oct. 15, 2021

LPG demand has been making headlines recently, mainly due to the recent pricing volatility in the Asian markets, but also in the West of Suez (Europe/US).  Asian markets are currently increasing LPG stocks in anticipation of winter heating demand, tightening the market as petrochemical facilities ramp-up their feedstock requirements amid an improving global economy.  One result of this pricing strength for LPG was observed in August/September when demand shifted to naphtha as a feedstock, supporting LR volumes and freight rates on the benchmark TC1 AG/Japan trade.  This week, reports by Platts and other sources pointed to a ...

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Opportunities in the LR1 Space

Oct. 8, 2021

Since our Tanker Market Outlook back in January we have placed emphasis on opportunities that may arise in the LR1 sector.  This often-overlooked tanker has the versatility to compete with the larger LR2 on some trades, as well as with MR2s for smaller cargo stems.  The trades in the LR1 space are far less consolidated than the larger tankers given it is flexible enough to operate in many areas and under many scenarios.  Despite that, we have identified some “pockets” of interest.

Overall, the global LR1 ton-mile demand is projected to grow on average by 1.1% in 2021, followed ...

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VLCC Floating Storage Update

Oct. 1, 2021

This coming week, OPEC and allies are meeting to decide on whether they will remain on the current plan of production increases of 400,000 b/d until the end of the year or modify it to better address rising global oil demand.  This is especially important if we consider the current energy crunch China is facing, as well as pressures from Europe and the West who are experiencing increasing gasoline prices, more so after hurricane Ida and other storms shut in production and disabled refineries in the US Gulf region, but also due to the concurrent rage in natural ...

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Impact of Cargo Switchovers on LR2 Utilization

Sept. 24, 2021

Tracking and measuring CPP demand on LR tonnage can be challenging at times, due to the fact that these vessels are able to switch between carrying clean petroleum product and carrying dirty ones such as fuel oil and crude. The practice is especially prevalent on the LR2/Aframax class since most of these tankers (especially the more modern ones) come coated with materials that allow both instances.  To address that, we have developed a methodology that accounts for the actual cargo carried by these vessels when measuring ton-day demand, with some interesting patterns emerging.

After the intense volatility recorded in ...

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CPP Fleet Profile and Contracting

Sept. 17, 2021

On a relative basis, freight rates for CPP tankers have outperformed the DPP vessels segments, due in large part to the supply side variable.  In fact, in our recent TMO Mid-Year Update we reiterated our call for a healthier and speedier recovery of the CPP sector (following our January projection), aided by the number of CPP tankers that have been deleted so far in the year as well as a more tempered orderbook. 

Continuing a multi-year trend, we note owners’ interests continue to lie within the LR2 (coated Aframax) and MR2 (Chemical – IMO II/III) sectors.  Orderbook figures at this ...

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